Why E-commerce Businesses Fail (And How to Avoid Their Mistakes)

Blog > E-commerce > Why E-commerce Businesses Fail (And How to Avoid Their Mistakes)

Starting an e-commerce business (or taking your brick-and-mortar business online) is an exciting venture! It doesn’t come without worries, though, and one of the top ones is probably failing as a small business. According to the Chamber of Commerce, about 21.9% of small businesses fail in the first year.

To set yourself up for success (and be part of the 78.1%), you need to know about the most common mistakes that lead to businesses failing. Keep reading to find out what not to do if you want to avoid your small business to fail.

1. Lack of Visibility

Imagine the Internet is a city and your website is your storefront within that city. If your store is located on a side street and isn’t listed on a map, you aren’t going to have many customers find you.

The same is true online. If your site isn’t easily accessible in Google’s search results, it’s essentially non-existent to your customers. Since 95% of all search traffic goes to first page results, you need to be in the top 10 websites that rank for the keywords your target audience is searching. The best way to avoid this and make sure your website is visible in search results is to invest time and effort into SEO, or search engine optimization.

person typing on computer and phone browser open to google

SEO involves researching and choosing keywords relevant to your audience and writing content for your website that uses those keywords properly. It might even include implementing a content marketing strategy and starting a blog to continue to serve your customers and grow your e-commerce website.

2. Poor Marketing Strategy

“If you build it, they will come” is the biggest lie small business owners believe. Let’s go back to our city and storefront illustration. If you wanted to bring more customers through your doors, you’d advertise and find ways to effectively promote your business.

Just like in real life, reaching your ideal customer online requires an impactful marketing strategy. This strategy might include social media promotion, pay-per-click advertising, content creation, email marketing, and a variety of other elements designed to work together to help get your business in front of the right customers at the right time. Without adequate strategy and marketing efforts, it’s unlikely your customers will find you. If developing your marketing strategy seems like a challenge, it may be beneficial to consult a marketing strategist for professional insights.

3. Too Much Competition

Before diving headfirst into your new e-commerce small business venture, be sure to research competitive options already available. You’ll want to be aware if you’re going to be competing with huge brands with significantly more resources at their disposal than you.

woman shopping on a jewelry ecommerce website that just released a product drop

When there is too much competition online or your competitors can outperform you, it’s easy for your product to get lost in a sea of search results. If you find yourself feeling like a minnow swimming with sharks, it can be helpful to find a niche and serve that niche well. For example, instead of selling office supplies and competing with chains like OfficeMax or Staples, you could niche down and focus on selling notebooks made of 100% post-consumer waste. By focusing your offer, you carve out a niche in which you can be competitive.

4. Poor User Experience

Many e-commerce small business websites are unsuccessful because they have an unpleasant user experience. The most successful sites work hard to ensure their customers have the smoothest possible experience from the moment they land on the site to the moment they complete checkout. You should always be looking for ways to streamline and improve your site’s user experience. Whether that’s through implementing a one-page checkout, simplifying your navigation, or solving another problem your customers experience, it’s important to keep this goal top of mind.

5. Poor Quality Content Writing

We can’t tell you how many times we’ve heard the phrase, “nobody reads content.” While that may be true for some, written product content is infinitely more impactful than you might think. Your product descriptions give you the opportunity to highlight the product’s features and how they’ll benefit the customer, provide education, and ultimately compel the customer to a buying decision.

person looking at a t shirt for sale and reading the product description

If writing isn’t your cup of tea, it’s worth the investment to hire a professional to write your content so you can ensure the products are well represented, the words on the screen help to move your customer to a buying decision, and all SEO best practices are being observed.

6. Poor Quality Product Photography

When customers buy online, they lack the opportunity to examine products for themselves and therefore place their trust in you and your business to represent your products well through photography. It’s important to be thoughtful about how you’re showcasing the product as a whole, its features, and any potential in use or lifestyle images that might help a customer choose to buy the product. Again, if you aren’t confident behind the camera, it’s absolutely worthwhile to hire a professional photographer to capture your products in a way that sells.

7. Little or No Investment

Especially when your business is brand new, it’s easy to see the price of professional web design and development services and run screaming to the nearest DIY website guide. However, in most cases, the downfalls of DIY-ing your website far outweigh the benefits of the money saved.

woman working on a website migration

For example, DIY websites commonly create poor user experiences, are complicated to navigate, have lengthy checkout processes, are not properly optimized for SEO, and lose sales when customers become frustrated. All of these problems can be avoided with proper planning. When you’re ready to start selling your products online, it’s important to budget for an investment in your website. And keep in mind, as your business grows, your website should grow with it. Plan for additional investment in website maintenance, upgrades, and improvement over time.

8. Lacking Customer Service and Support

Your website isn’t the only thing that contributes to the success or failure of your e-commerce business. Customer service also has a huge impact on customer perceptions of your small business.

To ensure you’re providing prompt and useful support to your customers, you want to offer multiple channels of communication (contact form, live chat, social media, phone, etc.), be clear about your availability, and consider implementing a CRM (customer relationship management) system to elevate customer experiences.

9. Limited Market

This one is simple. If buyers don’t exist, your products won’t sell. In most cases, reaching your target market is a matter of implementing an effective marketing strategy, but it’s possible your intended market might be so limited the business idea isn’t viable. Before you launch your e-commerce business, be sure to do your research and understand your target market and how to sell to them.

person searching online on their laptop

10. Lacking Calls to Action

Your customers need direction. If they reach a page on your site and don’t know how to take action, they won’t. Whether it’s prompting them with an “Add to Cart” message on the product page or displaying a related posts section on a blog post to keep the reader engaged with your content, it’s important to ensure you have the proper calls to action on your website to support your goals.

Every business owner hopes for success, but many don’t know how to make it happen. With the right strategy, plan, and investment, it’s much easier to run a successful e-commerce business. Now since you’re aware of some of the most common e-commerce mistakes that cause businesses to fail, you can take steps to avoid them in your own journey.

Are you ready to start or scale your e-commerce business? Contact our small business experts to start developing a strategy for your success!

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